EXHIBIT 10.11.1
FIRST AMENDMENT
TO
LOAN AND SECURITY AGREEMENT
This First Amendment to Loan and Security Agreement is entered into as
of December 16, 2002 (the "Amendment"), by and between COMERICA BANK -
CALIFORNIA ("Bank") and AVISTAR COMMUNICATIONS CORPORATION ("Borrower").
RECITALS
Borrower and Bank are parties to that certain Loan and Security
Agreement dated as of February 27, 2002, as amended (the "Agreement"). The
parties desire to amend the Agreement in accordance with the terms of this
Amendment.
NOW, THEREFORE, the parties agree as follows:
1. The following defined terms in Section 1.1 of the Agreement
are hereby added or amended to read as follows:
"Average Quarterly Balance" means the amount derived
from adding the ending balance under the Revolving Line for each day in
the quarter and dividing by the number of days in the quarter.
"Revolving Line" means a credit extension of up to
Six Million Dollars ($6,000,000).
"Revolving Maturity Date" means December 15, 2003.
2. Section 2.1(a)(i) of the Agreement is hereby amended in its
entirety to read as follows:
(i) Subject to and upon the terms and
conditions of this Agreement, Borrower may request Advances in an
aggregate outstanding amount not to exceed the Revolving Line. Subject
to the terms and conditions of this Agreement, amounts borrowed
pursuant to this Section 2.1(a) may be repaid and reborrowed at any
time prior to the Revolving Maturity Date, at which time all Advances
under this Section 2.1(a) shall be immediately due and payable.
Borrower may prepay any Advances without penalty or premium.
3. A new Section 2.1(c) is hereby added to the Agreement to read
as follows:
(c) Foreign Exchange Sublimit. Provided that there is
availability under the Revolving Line, Borrower may enter into foreign
exchange forward contracts with the Bank under which Borrower commits
to purchase from or sell to Bank a set amount of foreign currency more
than one business day after the contract date (each, a "FX Forward
Contract"). Availability under the Revolving Line shall be reduced by
the Bank's exposure in connection with all outstanding FX Forward
Contracts (collectively, the "FX Reserve"). Bank may terminate and/or
demand cash security for the FX Forward Contracts if an Event of
Default occurs or upon or after the Revolving Maturity Date. The terms
and conditions (including repayment and fees) of such FX Forward
Contracts shall be subject to the terms and conditions of the Bank's
standard forms of application and agreement for FX Forward Contracts,
which Borrower hereby agrees to execute as a condition precedent to
Bank's entry into any FX Forward Contract. Notwithstanding any of the
foregoing, in no event shall the aggregate amount of all FX Forward
Contracts entered into by Bank be such that the FX Reserve exceeds
$25,000.
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4. Section 2.2 of the Agreement is hereby amended in its entirety
to read as follows:
2.2 [Intentionally Omitted.]
5. A new Section 2.5(c) is hereby added to the Agreement to read
as follows:
(c) Commitment Fee. Borrower shall pay to Bank a
Commitment Fee equal to one quarter of one percent (0.25%) of (i) the
Revolving Line minus (ii) the Average Quarterly Balance in each
calendar quarter minus (iii) the average daily balance of Borrower's
deposits with Bank in the applicable quarter, which fee shall be
payable within five days of the last day of each such quarter and shall
be nonrefundable (provided that such fee shall be waived for any
calendar quarter in which the average daily balance of Borrower's
deposits with Bank in such quarter exceeds $3,500,000).
6. Section 5.4 of the Agreement is hereby amended in its entirety
to read as follows:
5.4 Bona Fide Accounts. The Accounts are bona fide
existing obligations. The property and services giving rise to such
Accounts has been delivered or rendered to the account debtor or to the
account debtor's agent for immediate and unconditional acceptance by
the account debtor.
7. The second paragraph of Section 6.3 of the Agreement is
amended in its entirety to read as follows:
Within fifteen (15) days after the last day of each month
during which any Advances were outstanding at any time, Borrower shall
deliver to Bank aged listings of accounts receivable and accounts
payable.
8. Sections 6.8, 6.9, and 6.10 of the Agreement are hereby
amended in their entirety to read as follows:
6.8 Adjusted Quick Ratio. Borrower shall maintain,
measured as of the last day of each calendar month, on a consolidated
basis, a ratio of Adjusted Quick Assets to Current Liabilities plus, to
the extent not already included therein, all Indebtedness (including
without limitation any Contingent Obligations) owing from Borrower to
Bank, less deferred maintenance contract revenue, of at least 1.00 to
1.00. As used herein, (i) "Adjusted Quick Assets" means, at any date as
of which the amount thereof shall be determined, the unrestricted cash
and cash equivalents of Borrower and its Subsidiaries plus net Eligible
Accounts which are trade receivables, determined in accordance with
GAAP, and (ii) "Current Liabilities" means, as of any applicable date,
all amounts that should, in accordance with GAAP, be included as
current liabilities on the consolidated balance sheet of Borrower and
its Subsidiaries, as at such date, plus, to the extent not already
included therein, all outstanding Credit Extensions made under this
Agreement, including all Indebtedness that is payable upon demand or
within one year from the date of determination thereof unless such
Indebtedness is renewable or extendible at the option of Borrower or
any Subsidiary to a date more than one year from the date of
determination.
6.9 [Intentionally Omitted.]
6.10 [Intentionally Omitted.]
9. A new Section 6.14 is hereby added to the Agreement to read as
follows:
6.14 Loan to Value Ratio. The aggregate amount of all
Borrower's outstanding Indebtedness (including without limitation any
Contingent Obligations) owing to Bank shall not
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at any time equal more than fifty percent (50%) of the fair market
value of the real property pledged by THE XXXXXX X. XXXXXXX AND
XXXXXXXX X. XXXXXXX REVOCABLE TRUST ("Trust") to Bank to secure that
certain Unconditional Guaranty given by Trust and XXXXXX XXXXXXX to
Bank in supports of the Obligations dated as of the date hereof.
10. Exhibit D to the Agreement is hereby amended and replaced in
its entirety by Exhibit D attached hereto.
11. Unless otherwise defined, all initially capitalized terms in
this Amendment shall be as defined in the Agreement. The Agreement and the other
Loan Documents, as amended hereby, shall be and remain in full force and effect
in accordance with its respective terms and hereby is ratified and confirmed in
all respects. Except as expressly set forth herein, the execution, delivery, and
performance of this Amendment shall not operate as a waiver of, or as an
amendment of, any right, power, or remedy of Bank under the Agreement, as in
effect prior to the date hereof. Borrower ratifies and reaffirms the continuing
effectiveness of all promissory notes, guaranties, security agreements,
mortgages, deeds of trust, environmental agreements, and all other instruments,
documents and agreements entered into in connection with the Agreement.
12. This Amendment may be executed in two or more counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one instrument.
13. Borrower represents and warrants that the representations and
warranties contained in the Agreement are true and correct as of the date of
this Amendment, and that no Event of Default has occurred and is continuing.
14. As a condition to the effectiveness of this Amendment, Bank
shall have received, in form and substance satisfactory to Bank, the following:
(a) this Amendment, duly executed by Borrower;
(b) a non-refundable loan fee of Seven Thousand One
Hundred Twenty Five Dollars ($7,125), plus all Bank Expenses incurred through
the date of this Amendment;
(c) Corporate Resolutions to Borrow;
(d) Unconditional Guaranty and Trust Certification;
(e) Auto-Debit Authoriation, Disbursement Instructions,
and Agreement to Provide Insurance;
(f) Deed of Trust;
(g) title insurance relating to the Deed of Trust
referenced above in an amount of at least Six Million Dollars;
(h) an appraisal of the real property commonly known as
[***] with results satisfactory to Bank; and
(i) such other documents, and completion of such other
matters, as Bank may reasonably deem necessary or appropriate.
*** Confidential Treatment requested pursuant to a request for
confidential treatment filed with the Securities and Exchange Commission. The
omitted portions have been filed separately with the Commission.
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IN WITNESS WHEREOF, the undersigned have executed this Amendment as of the first
date above written.
AVISTAR COMMUNICATIONS
CORPORATION
By: /s/ Xxxxxx X. Xxxxx
---------------------------------
Title: Chief Financial Officer
COMERICA BANK - CALIFORNIA
By: /s/ Xxxxxx Xxxxxxx
---------------------------------
Title: Assistant Vice President
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EXHIBIT D
COMPLIANCE CERTIFICATE
TO: COMERICA BANK - CALIFORNIA
FROM: AVISTAR COMMUNICATIONS CORPORATION
The undersigned authorized officer of AVISTAR COMMUNICATIONS
CORPORATION hereby certifies that in accordance with the terms and conditions of
the Loan and Security Agreement between Borrower and Bank (the "Agreement"), (i)
Borrower is in complete compliance for the period ending _______________ with
all required covenants except as noted below and (ii) all representations and
warranties of Borrower stated in the Agreement are true and correct as of the
date hereof, except those representations and warranties expressly referring to
another date shall be true, correct and complete in all material respects as of
such date. Attached herewith are the required documents supporting the above
certification. The Officer further certifies that these are prepared in
accordance with Generally Accepted Accounting Principles (GAAP) (except for the
absence of footnotes and subject to normal year end adjustments) and are
consistently applied from one period to the next except as explained in an
accompanying letter or footnotes.
PLEASE INDICATE COMPLIANCE STATUS BY CIRCLING YES/NO UNDER "COMPLIES" COLUMN.
REPORTING COVENANT REQUIRED COMPLIES
------------------ -------- --------
Monthly consolidated financial statements Monthly within 30 days Yes No
10K and 10Q 10 days of SEC filing date Yes No
Quarterly consolidating financial statements Quarterly within 30 days Yes No
A/R & A/P Agings, Borrowing Base Cert. Monthly within 15 days if borrowing Yes No
A/R Audit Initial and Semi-Annual Yes No
FINANCIAL COVENANT REQUIRED ACTUAL COMPLIES
------------------ -------- ------ --------
On a monthly basis:
Minimum Adjusted Quick Ratio 1.00:1.00 _____:1.00 Yes No
Loan to Value Ratio 50% _____% Yes No
COMMENTS REGARDING EXCEPTIONS: See Attached.
No
Received by: _____________________________
AUTHORIZED SIGNER
Sincerely, Date: ____________________________________
__________________________________ Verified: ________________________________
SIGNATURE AUTHORIZED SIGNER
__________________________________ Date: ____________________________________
TITLE
Compliance Status Yes
__________________________________
DATE
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CORPORATE RESOLUTIONS TO BORROW
BORROWER: AVISTAR COMMUNICATIONS CORPORATION
I, the undersigned Secretary or Assistant Secretary of AVISTAR
COMMUNICATIONS CORPORATION (the "Corporation"), HEREBY CERTIFY that the
Corporation is organized and existing under and by virtue of the laws of
Delaware.
I FURTHER CERTIFY that at a meeting of the Directors of the Corporation
duly called and held, at which a quorum was present and voting, (or by other
duly authorized corporate action in lieu of a meeting), the following
resolutions were adopted.
BE IT RESOLVED, that ANY ONE (1) of the following named officers,
employees, or agents of this Corporation, whose actual signatures are shown
below:
NAMES POSITIONS ACTUAL SIGNATURES
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acting for an on behalf of this Corporation and as its act and deed be, and they
hereby are, authorized and empowered:
BORROW MONEY. To borrow from time to time from COMERICA BANK -
CALIFORNIA ("Bank"), on such terms as may be agreed upon between the officers,
employees, or agents of the Corporation and Bank, such sum or sums of money as
in their judgment should be borrowed, without limitation.
EXECUTE LOAN DOCUMENTS. To execute and deliver to Bank that certain
First Amendment to Loan and Security Agreement dated as of December 16, 2002
(the "Amendment") and any documents related to the Amendment and that certain
Loan and Security Agreement dated February 27, 2002, as amended, and also to
execute and deliver to Bank one or more amendments, renewals, extensions,
modifications, consolidations, or substitutions therefor.
GRANT SECURITY. To grant a security interest to Bank in the Collateral
described in the Amendment, which security interest shall secure all of the
Corporation's Obligations, as described in the Amendment.
NEGOTIATE ITEMS. To draw, endorse, and discount with Bank all drafts,
trade acceptances, promissory notes, or other evidences of indebtedness payable
to or belonging to the Corporation or in which the Corporation may have an
interest, and either to receive cash for the same or to cause such proceeds to
be credited to the account of the Corporation with Bank, or to cause such other
disposition of the proceeds derived therefrom as they may deem advisable.
FURTHER ACTS. In the case of lines of credit, to designate additional
or alternate individuals as being authorized to request advances thereunder, and
in all cases, to do and perform such other acts and things, to pay
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any and all fees and costs, and to execute and deliver such other documents and
agreements as they may in their discretion deem reasonably necessary or proper
in order to carry into effect the provisions of these Resolutions.
BE IT FURTHER RESOLVED, that any and all acts authorized pursuant to
these resolutions and performed prior to the passage of these resolutions are
hereby ratified and approved, that these Resolutions shall remain in full force
and effect and Bank may rely on these Resolutions until written notice of their
revocation shall have been delivered to and received by Bank. Any such notice
shall not affect any of the Corporation's agreements or commitments in effect at
the time notice is given.
I FURTHER CERTIFY that the officers, employees, and agents named above
are duly elected, appointed, or employed by or for the Corporation, as the case
may be, and occupy the positions set forth opposite their respective names; that
the foregoing Resolutions now stand of record on the books of the Corporation;
and that the Resolutions are in full force and effect and have not been modified
or revoked in any manner whatsoever.
I FURTHER CERTIFY that true and correct copies of the Corporation's
most recent Certificate of Incorporation have been delivered to Bank as in full
force and effect on the date hereof.
IN WITNESS WHEREOF, I have hereunto set my hand on December 16, 2002
and attest that the signatures set opposite the names listed above are their
genuine signatures.
CERTIFIED TO AND ATTESTED BY:
X_____________________________________
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